Guide to Renters Insurance

Renters insurance covers the value of your belongings and liability in case someone is injured at the location where you are renting. In truth, the only key difference between renter’s insurance and home insurance is there is no home ownership involved.

Many people fail to get renter’s insurance quotes because they are under the misconception that the landlord’s policy will cover them in an emergency. This is not true. If your rental property is burglarized or personal belongings are damaged you could be out thousands of dollars if you don’t have renters insurance.

Landlords are responsible for the structure and liabilities of the total property. When it comes to liabilities – where someone is injured on your premises or bit by your dog at your apartment – it’s best to make sure your renter’s insurance will cover you too. Although landlords do have coverage in this area of liabilities, many building owners now require renters insurance because it means two insurance companies would be involved in a claim and not just one.

Since no home is involved, renters insurance rates are usually much cheaper and fall between $300-500 on average. But depending on how much coverage you need and your rental property’s location you could spend up to twice that amount, if not more. That might sound pricey but if you have an incident, and you’re not covered, it could end up costing you much more.

One thing that renters insurance doesn’t cover is similar to home insurance and that’s flood. If you have items that have been destroyed by flooding (and this means an act of nature, not your neighbors leaking pipes above you) then you won’t be covered if you have no flood insurance.

Another thing to look at in your renter’s insurance policy is how they judge your property cash value or replacement value. These might sound one in the same at first glance but they can be vastly different. Cash value pays the value of your items less depreciation. Replacement value means your insurance company will give you the funds it takes to buy a similar item today. The cost to upgrade from cash value to replacement value usually averages around 10% of the policy premium and for some people well worth it if they own newer items.

Two other items to consider is if you have anything that might be considered a ‘collection’ – china dolls, expensive jewelry, baseball cards, music CDs and so on. Any items you have large quantities of might need a special collection rider for you to receive insurance claim benefits so ask your agent if you have concerns. The second thing to consider is loss-of-use and additional living coverage. In the event of temporary relocation when the landlord might be fumigating or the structure is damaged in some way, you could be entitled to living expenses. This might not be a given on your policy so if you think it might be a concern considering adding it if it’s not already included.

Renter’s insurance brings peace of mind that your belongings, and liabilities, will be covered twenty-four hours a day, seven days a week.